Gen Z Travel Habits: A Shift Away From Traditional Loyalty Programs

A passenger walks to the airport terminal.
Photo Credit: Oleksandr Pidvalnyi via Pexels

While passengers remain eager to take flight and explore new destinations, a recent OAG survey reveals a shift in priorities, particularly amongst Gen Z and Millennial air travelers.

Titled “Beyond the Ticket: Winning Traveler Loyalty with Rewards & Ancillary Services,” the survey was based on insights gathered from 2,000 travelers.

Overall, it highlights a growing desire for flexibility and personalization, particularly among younger demographics.

Although loyalty programs hold steady popularity overall, airlines need to adapt their strategies to resonate with Gen Z and Millennials.

Jörg Möller from Pixabay

Gen Z and Changing Travel Priorities

Travelers are eager to fly and plan trips, but they continue to remain cost conscious. Notably, depending on the generation, many younger travelers are less swayed by traditional airline loyalty programs, according to OAG’s latest survey

These younger travelers, compared to their older counterparts, show lower enrollment rates. For Gen Z’s and Millenials, these come in at 65% and 70% respectively.

Compare this engagement with 89% for Baby Boomers and 80% for Gen X. The key barrier? Travelers cite a lack of consistent travel with one airline.

The survey pinpoints a critical opportunity for airlines: expanding reward options beyond traditional flights.

Rewards Aligned to Travel Styles have Appeal

Gen Z and Millennials, in particular, value rewards that align with their travel styles. Notably, 50% of Gen Z and 49% of Millennials express a desire to redeem points for vacation rentals.

Additionally, 73% of all travelers would like to use points for hotels, followed by car rentals (53%).

Beyond rewards, the survey unveils other factors influencing travel decisions:

  • Experiences Over Price: Younger travelers prioritize unique experiences, even at a slight premium. Gen Z and Millennials are 27% more likely to pay up to $100 extra to fly with a legacy carrier compared to budget airlines.
  • Convenience Reigns Supreme: Travelers overwhelmingly opt for online channels to purchase add-on services (48% website, 37% mobile app), with in-person purchases trailing significantly (10% at the gate, 5% in-flight). Gen Z stands out here, with 12% favoring in-flight add-on purchases.
  • Spreading Out Purchases: Booking remains the most popular time for add-on purchases (50%), followed by between booking and check-in (26%). Interestingly, 12% wait until check-in, with a smaller portion opting for airport purchases (6%) or in-flight decisions (6%).
  • Carry-On Conundrum: While 67% of travelers are willing to pay extra for additional carry-on items, half also agree with stricter airline policies regarding carry-on baggage, highlighting concerns about overcrowded cabins.

The Loyalty Landscape is Changing

“The loyalty landscape is undergoing a transformation, fueled by the growing influence of younger travelers,” remarks John Grant, OAG Chief Analyst.

Airlines that create dynamic rewards programs tailored to evolving preferences, and leverage real-time data to personalize marketing strategies, will forge stronger connections with customers and redefine loyalty in the travel industry.”

Passengers board a jet in stormy weather.
Photo Credit: Radubradu via Pexels

OAG empowers businesses throughout the travel ecosystem – from booking engines and travel apps to airlines and online travel agencies – to cater to the unique needs and preferences of today’s travelers.

The survey data, gathered from travelers who flew in the past year and users of OAG’s flight tracking app (Flightview by OAG), provides valuable insights for airlines seeking to win over the next generation of travelers.

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By Len Varley - Assistant Editor 4 Min Read
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